Institutional economics and psychoanalysis: how can they collaborate for a better understanding of individual-society dynamics? Arturo hermann* may 2005


The Contributions of Amitai Etzioni’s



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The Contributions of Amitai Etzioni’s Moral Dimension
In accordance with our interdisciplinary approach, we will consider some insights offered by one of Etzioni's works (1988), which analyzes the complexity of factors entering the individual’s decision-making process. In fact, although Etzioni’s work appears in a number of aspects different from the main concepts of institutional economics and psychoanalysis, we believe that this contribution could be useful for analyzing several issues related to individual-society dynamics.

He stresses the importance of normative commitments and affective involvements, referred to as N/A factors, expressed by the author in the following passage:


”The central thesis advanced here is: (1) the majority of choices people make, including economic ones, are completely or largely based on normative-affective considerations, not merely with regard to selection of goals, but also of means; and (2) the limited zones in which other, logical-empirical considerations are paramount, are themselves defined by N/A factors that legitimate and otherwise motivate such decision-making.”, (Etzioni 1988, 93).
This passage stresses that N/A factors may heavily influence the individual’s behaviour. In this sense, even the choices of maximizing profit or efficiency are values and may be affected by emotions and conflicts.

Once one recognizes the importance of N/A factors in the individual’s decision-making process, what can be said about their role in the logical empirical (L/E) factors which, according to conventional wisdom, should characterize decision-making process?

To quote Etzioni again,
“Implicit in the argument that L/E considerations are rational, at the core of the neoclassical paradigm, is the prescription that they are the correct ones to make. Indeed, it is widely acknowledged that neoclassical decision-making theories are much more prescriptive than descriptive. The role of affect, to the extent that is not simply ignored, is depicted as negative, a factor that “twists” or “distorts” thinking.”, (Etzioni 1988, 103).
The implicit idea underlying these opinions is that N/A factors are in opposition to rationality53.

Of course, N/A and L/E factors are quite different factors and involve different mental processes, but to consider them actually in opposition is tantamount to assuming a structural dissociation of mental processes.

In fact, according to this hypothesis, L/E factors can work only when N/A factors have been repressed and, in turn, N/A factors can work only beyond rational considerations.

The results reported in Etzioni’s work show that in many cases affective factors represent a positive element in rational decision-making.


To quote another passage,
”The main view followed here is that raw emotions often do curb reason, and that the socialization of emotions may never be complete. At the same time it is recognized that socialized emotions often, though not always, play significant positive roles, including enhancing decision-making. That is, whether affect is constructive or disruptive depends on the specific circumstances and the role it plays.” (Etzioni, 1988, 104).
In order to overcome the problems of neoclassical construction and to take into account the role of N/A factors, the author introduces the concept of “multiple self54”.

The two dimensions of the self are assumed to be pleasure and moral evaluation. Individuals seek to accommodate these conflicting elements, and this process can cause feelings of ambivalence, guilt and stress, which, in turn, can affect the actor’s ability to make sound choices (for example, by leading him or her to inaction). Such conflicts precede, accompany and follow individual choices. To quote another passage,

“The concept of a single over-arching utility disregards a major human attribute observable in the behavior under study: people do not seek to maximize their pleasure, but to balance the service of two major purposes — to advance their well-being and to act morally....rationality enters when we come to the choice of means. The position advanced here is that normative-affective factors shape to a significant extent the information that is gathered, the ways it is processed, the inferences that are drawn, the options that are being considered, and the options that are finally chosen. That is, to a significant extent, cognition, inference, and judgement — hence, decision-making — are not logical empirical endeavours but are governed by normative-affective (non-cognitive) factors, reflecting individual, psycho-dynamic and, we shall see, collective processes.”, (Etzioni, 1988: 83, 94).
An important implication of this analysis is that, due to the internal dialectics between these forces, the set of individual values and preferences are not stable but change over time according to the evolution of individual personality and external context.

The concept of multiple self, though representing a substantial step toward a better understanding of the characteristics of human behaviour, can be further developed.

In fact, the principle of multiple self does not consider sufficiently the effects of the unitary character of mind on “each self”.

In particular, the individual’s purposes of enhancing his or her well-being and acting morally are not necessarily at odds. In fact, enhancing personal well-being can well constitute a moral obligation for the concerned individual because he or she is, like everyone else, a human being; and, on the other side, acting morally can be a source of pleasure.

We suppose, according to the major psychological and psychoanalytic theories, that the mind acts unitarily and, therefore, each choice expresses (partly at a symbolic and unconscious level) the entire structure of the individual’s values, emotions, interests and conflicts.

The individual’s decision-making process may be conditioned not only by emotional factors but also by the characteristics of cognitive factors.

Many studies55 have shown how such factors may influence the individual’s decision-making process.

One important element is people’s limited ability to acquire and process information in a complex world. In order to make decisions, people employ many heuristic means which allow them to simplify the world they have to face.

Now, we will provide an example which, employing the concepts developed here and in the previous chapters, illustrates how complex the individual’s decision-making process can be.



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